Industry 4.0 Challenges and Opportunities

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1 Industry 4.0 Challenges and Opportunities Institute of Industrial Management and Innovation Research Graz University of Technology 14 th International Conference on Knowledge Technologies and Data-driven Business Graz, 19 th September

2 Agenda What does Industry 4.0 mean? Importance of industrial production for society Opportunities through Industry 4.0 Research activities at the Institute Summary 2

3 A historical perspective: From Industry 1.0 to Industry 4.0 Source: Picuture of Future (Spring 2013) 3

4 What does Industry 4.0 mean? Ø Integration of trends in information and communication technology in industrial production systems Ø Goal: Intelligent machines, logistics systems or other production infrastructure which exchange information with each other autonomously Definition of the platform Industry 4.0:... Availability of all relevant information in real time through a network of value creating devices (machines, ) Dynamic, real-time-optimized and self-organized production network for value creation... 4

5 Platform Industry 4.0 Ø German initiative to promote research in production Ø Industry 4.0 is a part of German government s action plan for the High-Tech Strategy 2020 adopted in November 2011 Ø Establishing of the platform Industry 4.0 in April 2013 Ø Three industry associations ( mechatronic ) are driving the platform: Federal Association for Information Technology, Telecommunications and New Media IT Verband Deutscher Maschinen- und Anlagenbau e. V. Mechanical engineering Zentralverband Elektrotechnik- und Elektronikindustrie e. V. Electrical engineering 5

6 Platform Industry 4.0 Board of Management from the industry Deutsche Telekom AG Hewlett-Packard GmbH IBM Deutschland GmbH SAP Deutschland AG&Co. KG FESTO AG & Co. KG Thyssen Krupp AG Trumpf GmbH + Co. KG Volkswagen AG PHOENIX CONTACT GmbH & Co. KG WITTENSTEIN AG ABB AG Infineon Technologies AG Robert Bosch Industrietreuhand KG Siemens AG + acatech - national academy of science and engineering 6

7 Platform Industry 4.0 Scientific Advisory Board Ø RWTH Aachen Ø Technische Universität Darmstadt Ø Technische Universität München Ø Karlsruher Institut für Technologie Ø Universität Stuttgart Ø Universität Paderborn Ø Technische Universität Berlin Ø Helmut-Schmidt-Universität Hamburg Ø Technische Universität Kaiserslautern Ø Technische Universität Dortmund Ø Universität Passau Ø Universität Oldenburg Ø Fraunhofer-Institut für Materialfluss und Logistik IML Ø Deutsches Forschungszentrum für Künstliche Intelligenz Ø Alexander von Humboldt Institut für Internet und Gesellschaft 7

8 Theses of the industry 4.0 platform Human Ø Human-oriented design of labor organization Ø Enhance the scope of action and the skills of employees (learning-friendly work equipment) Organization Ø Value creating networks integrate product, production and services Ø Cooperation and competition leads economically and legally to new structures Technology Ø Systems are easy to understand, intuitive, and friendly designed towards learning Ø Accessible solution pattern (Industry 4.0 by Design) Ø Intelligent products come with (active) information on board Ø System components offer their functionalities as services Source: Plattform Industrie 4.0: Industrie 4.0 Whitepaper FuE Themen; April

9 Smart Factory Internet of services Internet of things Source: Promotorengruppe Kommunikation der Forschungsunion Wirtschaft Wissenschaft: Umsetzungsempfehlungen für das Zukunftsprojekt Industrie 4.0 9

10 Revolution or evolution? Ø Potential Revolution through new production logic We are just starting Ø Modern information and software technologies are merging with traditional industrial processes internet of things Ø Evolutionary change of individual technologies, but revolutionary impact on the industry through the combination of many technologies is possible 10

11 Agenda What does Industry 4.0 mean? Importance of industrial production for society Opportunities through Industry 4.0 Research activities at the Institute Summary 11

12 Quotes from an article in the Harvard Business Review in March 2012 by Harvard Prof. G. Pisano and W. Shih: Does America really need manufacturing? - Yes, when production is closley tied to innovation Managers often don t appreciate how important manufacturing is to the product-development process The deep integration of product-design and manufacturing processes can actually pose a major barrier to entry for newcomers The standard of living will decline over time without manufacturing 12

13 Trade balances of high-tech products 250 $ billion USA Asien-9 China EU Japan Source: PCAST: Report to the President on ensuring American Leadership in Advanced Manufacturing, June 2011, p. 3 13

14 Development of energy prices in Europe 100 Performance $ per barrel of oil petroleum Erdöl natural Erdgas gas coal Kohle Source: Deutsche Rohstoffagentur in der Bundesanstalt Geowissenschaften und Rohstoffe (2011) 14

15 Price history for metals and minerals Metalle metals und and Mineralien minerals Price Index, 2000 = 100% Source: World Bank Commodity Price Data (2011) 15

16 Importance of production within society Ø Without industry no growth and no jobs (Competition Report 2013, European Commission) Ø Around the turn of the millennium: focus on outsourcing and services in the industrial nations nobody talked about manufacturing (!) Ø In industrialized nations, most of the innovations still come from the manufacturing sector (Competition Report 2013, European Commission) Ø Living standards of industrialized nations correlates with the degree of manufacturing 16

17 Agenda What does Industry 4.0 mean? Importance of industrial production for society Opportunities through Industry 4.0 Research activities at the Institute Summary 17

18 Expected potential of the Industry 4.0 (1/3) Ø Intelligent IT assistance systems for employees - Focus on creative and value-adding processes - Relief in routine tasks - Maximum use of working time (no waste of the time of employees) - Performance improvement by joy at work - Response to demographic change Ø Efficient consideration of individual customer requirements Ø Profitable production of individual pieces (batch size one) 18

19 Expected potential of the Industry 4.0 (2/3) Ø Good basis for decision making based on high transparency (Big Data) Ø Dynamic design of production processes Ø Flexible response to faults and failures Ø Increase of resource efficiency (energy, raw material, time of employees) Ø New value creation and new business models 19

20 Expected potential of the Industry 4.0 (3/3) Ø Additional value-added potential in the industry in Germany till 2025 Germany ,77 billion Manufacturing business 61,94 billion (IT) chemical products automobile engineering electrical equipment agricultural and forestry tele- communicadons Source: BITKOM; Fraunhofer IAO: Industrie 4.0 Volkswirtschaftliches Potenzial für Deutschland, Studie,

21 Specific areas named by the platform Industry 4.0 (1/3) Prerequisites and interdisciplinary technologies 1. Security & Safety 2. Industry 4.0 platform s reference architectures (standardization) 3. Radio communication for Industry 4.0 scenarios (internet, WIFI) Value added chain 4. New business models 5. Framework value creation chain (CPS platforms, collaborations) 6. Automation of value creating networks Source: Plattform Industrie 4.0: Industrie 4.0 Whitepaper FuE Themen; April

22 Specific areas named by the platform Industry 4.0 (2/3) Continuity of the engineering 7. Integration of real and virtual worlds 8. Systems Engineering Linked production systems 9. Analysis of sensor data and derivation of a data-based process control 10. Intelligence, flexibility and changeability New social infrastructure at work 11. Multimodal assistance systems 12. Technology acceptance and workplace design Source: Plattform Industrie 4.0: Industrie 4.0 Whitepaper FuE Themen; April

23 Specific areas named by the platform Industry 4.0 in detail (3/3) 11. Multimodal assistance systems Ø Human-centered design of human-machine interface (HMI) Ø Technological prerequisite for cooperation Ø Promoting creativity and learning ability 12. Technology acceptance and workplace design Ø Acceptance of newly introduced technologies Ø Socio-technical system Ø Qualifications of employees Source: Plattform Industrie 4.0: Industrie 4.0 Whitepaper FuE Themen; April

24 Agenda What does Industry 4.0 mean? Importance of industrial production for society Opportunities through Industry 4.0 Research activities at the Institute Summary 24

25 Institute of Industrial Management and Innovation Research (IBL) LeanLab Industry 4.0 Ø Physical training factory with an assembly line at the TU Graz for scooters Ø Research projects - Application of existing sensors to optimize assembly process - Project with Prof. Mayer-Schönberger, Oxford University Source: TU Graz / Lunghammer 25

26 Industrial 4.0 topics in the LeanLab Ø Analysis of sensor data and derivation of a data-based process control Ø Technology acceptance and workshop design Ø Integration of real and virtual worlds Ø Intelligence, flexibility and changeability Ø Human-Machine Interaction (HMI) Source: TU Graz / Lunghammer 26

27 Institute of Industrial Management and Innovation Research (IBL) FabLab Graz at the IBL Insitute Ø Digitalization of product design and manufacturing - maker spaces Ø Free access to high-tech fabrication democratization of production Ø FabLab Graz is part of the international FabLab network, hosted by MIT Ø FabLab Graz is the first FabLab at an Austrian University Rektor Harald Kainz, Source: TU Graz / Lunghammer 27

28 Institute of Industrial Management and Innovation Research (IBL) FabLab a place for Digital Fabrication Ø Tools, like CAD programs, simulation softwares, or 3D printers and laser cutters for prototyping are nowadays much more affordable. Ø Easy access to production infrastructure for industrial quality, through companies like Shapeways, Ponoko, TechShop, emaschineshop or the FabLab network. Ø Databases with digital designs under Creative Commons licenses permit the use of other designs - and thus a much more efficient development process. US Präsident Obama at a talk in a TechShop in Pittsburgh (Source: First 3D-Printed Car (Source: 28

29 Agenda What does Industry 4.0 mean? Importance of industrial production for society Opportunities through Industry 4.0 Research activities at the Institute Summary 29

30 Summary Ø Industry 4.0 strengthens the competitiveness of production sites in high-wage countries and secures the welfare in these countries! Ø Disadvantages by e.g. high energy and labor costs compared to low-wage countries can be compensated by efficiency Ø Expected potential through efficiency is up to 80 billion EUR in GER. Ø Industry 4.0 is a solution concept, that initiates production research projects for the coming years. Software development is crucial for success! Ø LeanLab and FabLab strongly focus on topics of Industry 4.0 at IBL Institute Ø High Tech manufacturing such as 3D Printing or Laser cutting enables combined with industry 4.0 enables new business models (like local motors) 30

31 Thank you for attention! Institute of Industrial Management and Innovation Research Graz University of Technology 31

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